If a Government Were to Find That It Cannot Raise

question 80

Multiple Choice

If a government were to find that it cannot raise taxes any further, and that it cannot borrow any further from financial markets, the government:

• A) cannot increase its spending any further.
• B) can increase spending by having the central banks purchase its bonds.
• C) is in default.
• D) can decrease the amount of money in circulation.

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Definitions:

Subsidiary's Stock

Shares representing ownership in a company that is owned or controlled by another entity, often referred to as the parent company.

Appraisal Rights

The legal right of a company's minority shareholders to have their shares appraised and to receive monetary compensation in the event of certain corporate actions, like mergers.

Dissenting Shareholders

Shareholders who do not agree with certain corporate actions, such as mergers or acquisitions, and are legally entitled to be bought out by the corporation under specific conditions.

Court-Appointed Receiver

A neutral third party appointed by a court to manage and oversee the property or assets that are the subject of litigation, ensuring preservation of their value during the dispute.